Digital revenue may be at peak

After another year of plunging music sales, record company executives are starting to contemplate the unthinkable. The digital music business, held out as the future of the industry, may already be as big as things now stand going to get.

The past two years

In each of the past two years, the rate of increase in digital revenue has in broad outline halved. If that trend continues, digital sales could top out at less than $5 billion this year, about a third of the overall music market now many billions of dollars short of the amount needed to replace long-gone sales of compact discs.

Moore said the recent introduction of tough anti-piracy laws in South Korea and France, which authorize cutting off the Internet connection of repeat offenders, showed that stricter enforcement could persuade listeners to seek out legal alternatives to unauthorized file-sharing services.

In South Korea, where the music business has long been blighted by piracy, digital music sales rose 14 percent in the first half of last year, afterwards the new law went into effect in 2009, the federation said. The first account suspensions occurred in the autumn, and the group said the publicity surrounding the crackdown should help convert more consumers.

So-called graduated response system

France has as well implemented a so-called graduated response system. In the French system, cutting Internet access is preceded by several warnings.

Industry executives say they are encouraged by the development of new digital services, particularly those that embrace the principles of cloud computing. These services can provide unlimited amounts of music to listeners on demand, through a variety of devices, from mobile phones to televisions.